Macromegas #10 - Friday Reads

Tech Companies (Twitter, TikTok, and Xiaomi) and the US vs. China.

Hi friends,

Happy Friday!

Useful Knowledge

Best articles I read over the past few weeks that can help you understand the world better around strategy, macroeconomics, finance, and economic history.

This week's running theme: Tech Companies (Twitter, TikTok, and Xiaomi) & the US vs. China.

TikTok - the ideology war between China and the West

According to Ben Thomson, China is not really trying to ease into global liberalism at its own ace, but rather to impose its own ideology on its sphere of influence.

It is not only TikTok, but also Huawei (vs. US, UK), etc. The first order thinking on my side is that it is largely US propaganda to maintain its imperial hegemony on the global world order - Ray Dalio's Changing World Order share thorough data and thinking on this - but the second-order thing is that China is really pushing an agenda that conflicts with Western values of individual liberty, US values of freedom of speech, and European values of individual privacy.

Read the Stratechery essay here: The TikTok War

For a fascinating story on the history of China's perspective on global trade and international diplomacy, read Dormin's essay: The Opium War – The War On/For Drugs

Xiaomi and the future of IoT

I am convinced that IoT (Internet of Things) is going to explode as a market opportunity in the next few years.

It goes in line with all current well-established trends:

1. increased Internet access penetration and faster connections - Starlink, 5G (Starlink is a very big deal)

2. ambient computing and AI assistants - Apple Watch + Siri, Amazon Echo (The Battle for the Home)

3. APIzation of everything (The API Economy)

I wrote an essay on the Chinese's company Xiaomi very smartly and promisingly cornering the opportunity as a platform, rather than an aggregator (Aggregation Theory).

Read my essay here: Xiaomi and the future of IoT

A business plan for Twitter to actually start making money

Fixing Twitter by recognizing what it really is and capturing the value it creates.

• What’s wrong with Twitter and why?
  -> In the value chain it creates, Twitter does not extract much value, leaving most of it to its "customers" - for Ben Thompson 's Stratechery readers, strong parallels with his "Bill Gates Line" concept

• Who is Twitter’s customer and what is its Job to Be Done (JTBD)?
  -> Twitter is the social network wh need to promote their ideas (and monetize them, hence)

• What would Twitter look like if I ruled the tweets?
  -> no spoiler from me there

Read the full essay by Packy McCormick here: If I Ruled the Tweets

Personal Growth

A better approach to Mental Models

I love Mental Models, and I know some of you do as well.

But most people talking/writing about Mental Models put everything in the same basket: from fundamental laws of thermodynamics to cognitive biases. It annoys me more than it should.

I really enjoyed this specific chapter because of his very interesting categorisation that I have been thinking about for quite some time as well:

1. Descriptive mental models that come from domains like physics, chemistry, economics, or math, that describe some property of the world.

2. Thinking mental models that have to do with divining the truth (epistemic rationality) — e.g. Bayesian updating, base rate failures, the availability heuristic.

3. Thinking mental models that have to do with decision making (instrumental rationality) — e.g. inversion, ‘tendency to want to do something’, sensitivity to fairness, commitment & consistency bias.

This is based on seeing the world through those 2 distinct filters:

1. Epistemic rationality is “how do you know what you believe is true?”

2. Instrumental rationality is “how do you make better decisions to achieve your goals?

Read the whole thing here: Putting Mental Models to Practice, Part 2: An Introduction to Rationality

How to leverage your time to the maximum through the right decisions

Tim's answer: look for single decisions that remove hundreds or thousands of other decisions.

Read Tim Ferriss's essay here: Finding the One Decision That Removes 100 Decisions

Thanks for reading, have a great weekend, and talk to you next week,

V